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Bethlehem Steel Corporation  (1857 – 2003)

Bethlehem Steel Corporation  (1857 – 2003)
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by Bob Gloor ~

Bethlehem Steel began its story on April 8, 1857, as the Saucona Iron Works in South Bethlehem, Pennsylvania. On May 1, 1861, the company changed the name to Bethlehem Iron Works, and in 1899 it changed its name again to the Bethlehem Steel Company.

In its early years the company produced railroad cars and armor plating for the US Navy.  It became a major supplier of armor plate and ordnance products to the US armed forces during World War I and World War II.  It was the first US steel mill to install the revolutionary grey rolling mill, and produced the first wide-flanged structural shapes manufactured in America. These structural shapes were largely responsible for ushering in the age of the skyscraper, and established Bethlehem Steel as the leading supplier of steel to the construction industry.  It produced the steel for many of the country’s most prominent landmarks, including New York City’s Rockefeller Center, Madison Square Garden, and San Francisco’s Golden Gate Bridge.

Bethlehem Steel’s high point came in the 1950’s as the company began manufacturing some 23 million tons of steel per year, and built its largest plant at Burns Harbor, Indiana, between 1962 and 1964. In 1958, the company’s president, Arthur B. Homer, was the highest paid business executive in the United States.

From 1923 to 1991, Bethlehem Steel was one of the world’s leading producers of railroad freight cars through their purchase of the former Midvale Steel and Ordinance Company of Johnstown, Pennsylvania. Despite its status as a major integrated steel maker, Bethlehem Steel Freight Car Division pioneered the use of aluminum in freight car construction.  The Johnstown plant was purchased through a management buyout in 1991, creating Johnstown American Industries.  Johnstown has since expanded with the acquisition of a second manufacturing plant in Danville, Illinois, and a public offering on the Nasdaq under the new name FreightCar America Corporation.  FreightCar America is the only American-owned part of the former Bethlehem Steel that remains publicly traded.

While the US steel industry prospered during World War II, the steel industries of Germany and Japan were devastated by the Allied bombardment. As a result, they had to be rebuilt after the war, but were rebuilt with more modern techniques and innovations such as continuous casting in their newer plants. This efficiency, plus the high benefit and wage concessions given to US steel workers during the two decades that the US steel industry operated without significant competition, set the stage for significant price differentials with foreign steel producers in the 1980’s.

Cheaper foreign steel began being imported in the 1980’s, negatively impacting Bethlehem Steel’s market share in the US steel industry.  In 1982, the company reported a loss of 1.5 billion dollars, and it was forced to shut down many of its operations.  In the mid-1980’s, the market for the plant’s structural products began to diminish, and new competition entered the marketplace. Profitability returned briefly in 1988, but restructuring and shutdowns continued through the 1980’s and 1990’s.

Lighter, lower construction styles, resulting in low-rise buildings that didn’t require the heavy, structural grades of steel produced at the Bethlehem plant, caused Bethlehem Steel to discontinue its steel making activities at the main Bethlehem plant by the end of 1995. After roughly 140 years of steel production at its main plant, the company ceased its operations in Bethlehem. The company exited the railroad car business in 1993 and ceased shipbuilding activities in 1997 in an attempt to preserve its core steel-making operations.

In 2001, Bethlehem Steel formally filed for bankruptcy. Two years later, in 2003, the International Steel Group acquired the company’s remnants, including six massive plants.

With the closing of its local operations, and the extraordinary ensuing impact on the Bethlehem and surrounding Lehigh Valley area, Bethlehem Steel decided to help revitalize the south side of Bethlehem and hired outside consultants to develop plans to reuse the massive property. The consensus was to rename the 163-acre site “BethWorks” and use the land for cultural, recreational, entertainment, and retail development.  The National Museum of Industrial History, in association with the Smithsonian Institution and the Bethlehem Commerce Center, consisting of 1,600 acres, were erected on the site.

But the story of Bethlehem Steel cannot be written as a simple recounting of the facts about the birth, life, and ultimate demise of the company without mention of the people who worked there, who were, in fact, the very lifeblood of the corporation.  Many of the union laborers spent entire careers toiling away at jobs that required them to work the seven-day rotating shift schedule, a grueling task for any man, especially over a lifetime. But these were men who took pride in an honest day’s work, men who faced their responsibilities of mortgage commitments and the raising of children with a certain stoic resolve that epitomized those who had lived through the Great Depression as well as the post-World War II generation.

These were men for whom the smell of the coke ovens, the roar of the blast furnace, the heat of the soaking pits, and the whine of the saw cutting the I-beams was a way of life. They went about their daily tasks with the satisfaction that comes from doing a good job; plain men mostly, just glad to have a job that paid them a good wage and enabled them to live their part of the American dream. They asked for little and complained even less. It’s sad that it was these very men who were the ultimate victims in the eventual demise of the company they thought would always be there, and would be an unending source of sustenance for them and their families. They were the pawns in the ultimate chess match that was played out between management and labor, unable to comprehend the realities of the “winner-take-all” mentality that eventually allowed foreign competition to dominate the marketplace and force a company of its size out of business.  The concessions asked for by their labor unions and the compromises made by management were the eventual downfall for both sides, yet neither was able to foresee the ultimate outcome until it was too late.

As a young man just out of college in 1967, I was fortunate to have spent a year working as a technical trainee in the Industrial Engineering Department of Bethlehem Steel in its Bethlehem, Pennsylvania, plant.  I was able to tour the entire steel-making facility during my year’s tenure, and I spent time in the various divisions doing job analysis and time-study work. I saw it all.  I remember even then sitting in management meetings where the mention of foreign steel makers trying to get a foothold in the US market was generally scoffed at.  It was also during this time that I remember the union laborers receiving fifteen weeks vacation every five years as a part of their benefits, and even then wondering to myself how a company could continue to compete in the worldwide marketplace with such concessions.  As time would ultimately prove, they could not.

My year was indeed a learning experience, especially the time I spent doing time study work and “swinging” with the crews in various divisions as they did their jobs on the dreaded seven-day swing shifts.

I got to know these men intimately, the names of their wives and children, their hopes and dreams for themselves and their families. They were uncomplicated men doing hard, mostly manual work.  They were men with nicknames like “Bagsey,” “Slim,” “Hoppy,” and “Spud.”  Suspicious of guys like me who showed up on the job every day with a stopwatch and clipboard, whose job was to record their every movement as it pertained to their job duties, they would, nevertheless, spend their breaks with me, laughing and telling jokes, and sharing whatever was in their lunchboxes. The fond memories of those days will stay with me forever.

The BethWorks operation was sold in December 2006 to a development company from Las Vegas who turned the old property into a multi-million dollar commercial business venture. The focal point of the enterprise is a casino.  But in my mind, I still recall the memories of standing out in the bitter cold with the “beam-yard crew” on midnight shifts in the winter of 1968. To keep warm, the men built makeshift fires in empty 55-gallon oil drums. One of my job assignments that winter was doing time study work on the crews loading the trucks that would carry the I-beams to build such structures as the World Trade Center in New York City.  The conversations of the men around those little fires were of the hopes and dreams of themselves and their children, and a future that they thought would always be insured by their hard work and dedication to “Mother Steel.”

Somehow the sights, smells, and sounds of the old steel mill seem incongruous compared to the noise of the throngs of people that will descend upon this new Mecca of “instant wealth”; people standing in front of the slot machines and blackjack tables, hoping to “strike it rich” with one throw of the dice.  It is indeed a quirky twist of fate, and the ultimate dichotomy, that such diverse philosophies of the work ethic would be played out on the very same stage only a generation apart.

It seems sacrilegious that the memories of those who spent careers as players in the building of America, along with a place that was once the embodiment of the American work ethic, must succumb to the frivolity of those who see their futures as players of another sort. Yet, in the final analysis, it is money that talks, much as it has throughout history. The financial greed of the few always overcomes the social conscience of the many.

I left Bethlehem Steel in October of 1968, unsure of what I wanted to do with my life, but feeling fairly certain that a career in a big industrial complex such as that was not for me.  I never returned until November of 2006 when I was given special permission to go back into the old, abandoned plant and take photographs as a tribute to a once proud giant of industry and to the men who made it what it once was.  After thirty-eight years, there wasn’t much left that was recognizable, yet the voices and images of the men I knew so many years ago were with me as I walked through the remnants of the old plant.

I think of this as a tribute to a once-great company, a way of life, and to an era that is gone forever.  But mostly I write it in memory of all those everyday, hard-working heroes of America’s great industrial past.  Somehow, I think Bagsey and the boys would have liked that.

About the author:  Although Bob Gloor is a resident of Sun City Carolina Lakes, he is wandering soul.  I have heard and read many of his stories and would not believe any of them if I had not seen the evidence myself. He is the kind of guy your mother warned you about, and once you have read one of Bob’s stories, “The most interesting man in the world” becomes a little less interesting.

Featured image courtesy of Karan Bhatia